Jim
According to the WSJ article that you referred to:
<< Compaq is imperiled by its own
mistakes, its reliance on servers as the top
source of profits and its continuing struggle to
change fundamental production and distribution
methods. >>
Which happens to be where Dell makes its big $$$s as well.
<<Notebook computers, another high-profit product, are also coming under
greater pricing pressure. Several manufacturers introduced fully configured
models at $2,000, several hundred dollars less than has been normal for
entry-level notebooks >>
<<Notebook computers, another high-profit product, are also coming under
greater pricing pressure. Several manufacturers introduced fully configured
models at $2,000, several hundred dollars less than has been normal for
entry-level notebooks. Toshiba, the leading producer, has been cutting
prices to fend off IBM and Compaq. Meanwhile, IBM has quietly
increased some of its dealer incentives.
"There's no safe bastion anymore," said Ashok Kumar, analyst at
Loewenbaum & Co., an investment firm in Austin, Texas. "People used to
be able to say their servers and notebooks would offset the low margins in
desktops.">>
I don't understand why Dell will come out smelling all sweet, with
so much blood and gore on the street? As I see it, this is NOT
a low-end problem but rather a problem across the board(and if
WSJ article is to be believed, the high margin stuff stinks the worst!).
Price war won't help any of the boxmakers, and seems like that's exactly what's going to happen purty soon(since no one would want to
give up market share).
If I were a "long-termer" I would ATLEAST write some covered calls
and put a hold on pc purchases till the bigboys duke it out! |
